People + Strategy Journal

Winter 2021

A Case Study of How to Accelerate Progress in Leadership Diversity

Companies aiming to improve diversity in its top leadership ranks would be wise to follow the successes and lessons learned in the BOLD leadership development program.

By Rita McGrath, Valize
A Case Study of How to Accelerate Progress in Leadership Diversity
Well-known and respected organizations have articulated a commitment to diversity for decades. Despite good intentions and considerable effort, we must do better, move faster, maintain unrelenting focus and hold leaders—and ourselves—accountable for making greater gains. This article offers one potential roadmap to achieving this goal, in the form of a case study with a client who sought to increase representation of women and under-represented, minority top talent. My hope is that this will be helpful for other organizations seeking to come through the fog of this crisis with leadership groups more representative of their customers and of society as a whole. 

I’ll call the client company JJM; it’s a large multinational with tens of thousands of employees—and a historically less-than-stellar record on diversity. A former female executive there said, “They had a well-deserved reputation for being about the worst in the whole industry—I’ve had one of the few senior women tell me they couldn’t support my career because it would hold them back. They were awful—that’s why I left.” Improving on that legacy became a corporate imperative. 

Innovation and the Diversity Agenda

As extensive research has shown, diverse groups outperform homogenous groups on innovative tasks. For example, research by Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin found a strong correlation between two measures of diversity and performance outcomes.1 The two forms of diversity they assess are inherent and acquired—inherent refers to things like gender and race, and acquired means life experiences and learning. Companies whose leaders have at least three inherent and three acquired elements of diversity are what they call 2D leaders. Employees at companies that reported 2D diversity were 45 percent more likely to say that their organization had grown market share the previous year and a full 70 percent more likely to have entered a new market successfully. They suggest that this is because organizations that embrace these two kinds of diversity are places in which “minorities form a critical mass and leaders value differences,” and thus are places in which more good ideas are not only heard but also funded and sponsored. More good ideas, more chances for success. Further, teams with members who share their client’s ethnicity were 152 percent more likely to understand their customers better than teams without such commonality. 

The flip side is true as well. Of the 78 percent of the respondents in their study that reported working for firms that lack 2D diversity in leadership, women in those firms were 20 percent less likely than straight white men to have their ideas sponsored; people of color 24 percent less likely and LGBTQ individuals 21 percent less likely. 

Knowing that you are short-changing yourself by discriminating against the minority doesn’t seem to matter. Tristan Botelho and Mabel Abraham found—astonishingly—that even in situations in which objective performance measures existed and people had every incentive to eliminate bias, they nonetheless shortchanged themselves when data revealing female identities led them not to invest in women with superior investment performance.2

Other studies have found that teams with diverse compositions process information and tasks in a smarter way than homogenous teams. Katherine W. Phillips explained the mechanism by which diversity leads to better outcomes: “encouraging the consideration of alternatives” causes people to be more thoughtful.3 David Rock and Heidi Grant found that diverse teams focused more on facts, process the facts more carefully and were more likely to entertain novel ideas than more homogenous teams.4

Yet barriers remain. Racism and sexism lead to energy-sapping microaggressions. Biased thinking and mental shortcuts can also result in skewed outcomes. Lauren Rivera, a professor at Northwestern, sat in on a consulting firm’s deliberations about new hires and found “remarkable” discrepancies based on factors such as ethnicity and gender, as shown in Figure 1.5


figure 1

This brings us to an important element of working our way through the current fog caused by racial inequality and unrest, a pandemic and divisive politics: humans do not do well under uncertainty and when we rely on gut instincts. We are wired to be impulsive, to make split-second decisions and to be unduly influenced by exogenous factors. To combat these systematically, you need to alter the context in which biases have less power to influence the outcome—what some call the “choice architecture.” 

For instance, research finds that men who don’t feel they have “psychological standing” to get involved in gender parity efforts tend not to. When the CEO or equivalent leader communicated that he expected and was monitoring their support, participation rates equaled that of their female counterparts.6

JJM, our sample client, re-wired the choice architecture to accelerate the development of diverse talent. 

A New CEO Puts People on His Agenda

JJM had run two pilot programs before we started working together, but hadn’t run any programs intended to develop senior leaders. Instead, senior people attended various open-enrollment executive courses. A new global head of talent development examined that approach and concluded that it was too scattered and uneven. She proposed a customized program that would help leaders problem-solve together and create stronger internal networks. This approach dovetailed with a sense of urgency on the part of a new CEO to tackle JJM’s lack of diverse talent among its more senior ranks.
 
The first cohorts of this new program included only women and underrepresented minority members. 

This was not without controversy, and the senior, female sponsor let me know that there were several senior, white men who felt this was both unfair and unrealistic. The concern expressed was two-fold: 1) white men shouldn’t be excluded and 2) having white men in the course would be more real-world so that women and people of color can “learn” to work with them. A trickier question concerned the participants’ perspective on being singled out for a special program. Some felt that this would stigmatize them. 

JJM’s leaders, however, believed a special effort was warranted because the gap between the actual and desired state was so large. The program very quickly became recognized as the one to be in if you were top talent. 

JJM also made a significant senior hire, putting a Chief Diversity and Inclusion Officer on the leadership team and solidifying the commitment to diversity and inclusion. This new leader spearheaded a number of initiatives across the company, including devoting both budget dollars and talent to the effort. 

business professionals

Be BOLD
My group at Columbia Business School Executive Education was chosen to develop the program for JJM, which I’ll call BOLD. Success metrics were firstly retention, as top diverse talent is much in demand. Next, the strength of succession pools. Then, the composition of the senior leadership team. JJM also wanted to demonstrate that the company was committed to engaging these groups. Finally, they wanted to create an external reputation of welcoming and developing diverse leaders. 

Each program cohort consisted of two three-day, in-person modules with additional time for coaching, assessments and participant work on a personal case project. During the four months between modules, there would be webinars, access to the faculty and personalized coaching. The program also included a manager track, for the people (mostly men) whose direct reports would be participants in the BOLD program. There were several opportunities for side-by-side learning with managers and their people. Executives made up a big part of the content in the program, sometimes leading sessions on their own and sometimes co-teaching with other faculty and thought leaders. 

We made every effort to include real-time opportunities to practice new skills in the course curriculum, for instance, orchestrating social events for networking, right after a session on how to network. There were “wow” events, which included site visits to interesting companies and locations, including the Columbia Startup Lab. This feature added to the program’s cachet and reputation. 

Success Elements of the BOLD Program

Participant Selection. Unlike many organizations, where decisions about who joins a customized development program are either random or political, JJM was very intentional about nomination. 

They identified top talent across the divisions of the company. Participants had to have high performance ratings based on a company-wide review process and had to be viewed as having two-plus levels of growth by their nominators. All nominations went up to the C-Suite for approval, as a way of highlighting the talent to the organization. Senior leaders hiring for open leadership positions were encouraged to start with the list of graduates from BOLD, although this wasn’t applied consistently. A major lesson is that this should be the expectation set at the time of nomination. 

We ran the program with seven cohorts, ranging in size from 35-50 attendees. With that many leaders having a touchpoint at the program, its impact on the leadership choice architecture was magnified. 

Pre-Course Work. The participants did a number of customized assessments, including one by Hogan, one that assessed learning agility and our own Columbia GLeaM networking assessment that looks at the structure of personal networks. They were also assigned an executive coach. Participants’ managers were engaged in pre-course webinars with the other managers in order to know how to support their attendees and what they should expect. 

In-Person Modules. During the face-to-face sessions of the program, we had a mix of Columbia-led sessions on topics that have been shown to be particularly helpful to people in the minority—generally in low-power positions in organizations, as well as on more general topics. We had terrific participation from the executive ranks, with sessions on strategy, finance, innovation and other functional topics. We also had networking events, and senior leaders were always invited, even if they didn’t have a participant in the program. 

Intercession Activities. During the four months or so between the face-to-face modules, we ran monthly webinars to which participants, their managers and alumni of the program were invited. The participants also worked on a business case that they presented to a group of senior leaders in the second face-to-face module as an illustrated storyboard, to try to get away from an over-reliance on PowerPoint. 

Connections Across the Business. We also connected participants in BOLD with other firm-wide groups, such as the employee resource groups, that allowed for networks to be created across the organization and for people in those networks to further spread the word about the mission.

business woman

Learn from Our Experience
Senior leadership commitment is critical. In over 20 years of doing programs like these, I have seldom seen an organization that went to such lengths to engage its senior leaders. The CEO was our executive sponsor, the leadership team came to some sessions, dinners, cocktails parties and taught jointly with our faculty—it was very clear that they made participating in our program a priority. Without this level of commitment, BOLD would not have been so impactful. 

Define the design team and establish decision rights. The good and bad news was that BOLD was a high-profile, well-funded, high-stakes program that was on the radar of the CEO and his team. We ended up with a large number of people and an even larger number of opinions. Going forward, I would ask for a charter for each person involved with the design, and for clear decision rights for the different program elements. 

Who owns the talent? Because our participants were such strong leaders, their managers were reluctant to see their profiles rise for fear of losing them. Although we made a point that the managers’ role was to be an advocate, in some cases the participants were frustrated by territorial leaders. If there were no opportunities to stay and grow, many left to enjoy success elsewhere, making JJM “a great company to be from.”

Penalize absences and conflicts. The JJM design team decided that missing more than half a day would disqualify a participant from their cohort. Otherwise, such a complex program could easily have started to splinter, devaluing the experience for everyone. 

Offer training on mentoring and coaching. We didn’t anticipate the major skills gap we discovered among many of the JJM managers. The managers, most of whom were white males, either didn’t know how or felt uncomfortable mentoring women or people of color and avoided one-on-one feedback sessions. We instituted a three-way meeting with the participants’ executive coach to make sure essential feedback was shared. In retrospect, greater skill-building for managers regarding mentoring and supporting women and people of color is an important aspect of any such program. 

Formulate an extensible curriculum. One of our more pleasant learnings was that much of the curriculum developed with women in mind worked well for other under-represented groups. Much of it has to do with how to address being in the minority, including making your voice heard and overcoming stereotypes. 

Avoid the tyranny of “too much.” The Columbia program was informed by learning from previous pilot programs, whose members had a strong sense of ownership of BOLD. Indeed, many people across the organization had ideas for content. We had too much content, too many ideas, too much stuff to think about—people needed more time to reflect. When it comes to learning, less is often more. One can make progress by starting small—in the case of JJM, a pilot program for female leaders and other diverse talents was launched just in one division. It attracted significant interest from across the organization, paving the way for the larger program that followed.

Encourage psychological safety for emotions. Unlike “normal” executive education experiences, the subject matter of BOLD inevitably led to some tense moments. For instance, in a discussion of managing the perception of a younger woman and older man going to dinner together, one participant burst out “I shouldn’t have to bear the burden of other people’s perceptions and you shouldn’t be telling me that it’s my responsibility!” A Black participant, recounting her hesitancy about receiving emergency medical care said, “Look, I don’t have my masters’ degree stapled to my forehead. I was uneasy about the treatment I would receive.” It’s a good idea to prepare your faculty and team with potential responses to these kinds of issues. 

Search broadly when staffing the program. One unintended consequence of so many organizations’ efforts to create more inclusive environments is that finding diverse talent on the faculty and delivery side could be quite a challenge. Firstly, they were very much in demand, and secondly, most of them have day jobs at the university that can create schedule conflicts. But when we searched beyond our usual networks, we found amazing talent. 

Creating a Sense of Urgency About Allyship

JJM is now very transparent about their diversity data, which is highlighted on its website. The company would make an excellent role model for those who seek to be allies for diverse talent. Here are four metrics for companies to get a sense of where they are, and how much work remains to be done. 

First, with economic justice and social justice deeply entwined, it is important to understand the jobs within your organization. Are they, as MIT’s Zeynep Ton says, “good jobs” that provide stability, a living wage and a chance to progress?7 Or are they poorly paid with irregular hours, instability and few benefits? As she notes, we often think of pay as reflecting the market value of skills but forget that it is very hard to be a model employee when faced with the enormous hurdle of near-poverty wages and little assistance. She suggests reporting on wages by gender, race and level, because the results might surprise you.8

Second, as Stanford’s Jeffrey Pfeffer notes, other kinds of data about the well-being of your workforce “are there if you want to see them.” For instance, your Pharmacy Benefit Manager could tell you (with appropriately anonymized data) what parts of your organization experience higher than average utilization of mental health services, antidepressants and painkillers, often associated with stress at work. Bad leaders are strongly linked to such stress. Traditional measures like retention rates can be buttressed by reviews on Glassdoor and similar sites. 

Finally, recall that scathing interview I opened this piece with? Here’s what employees are saying about JJM today: “JJM cares about its employees, which is evidenced of their people and business resources groups and diversity and inclusion program. There are many development opportunities at JJM.” 82 percent of the employees reporting on the company on the Glassdoor platform would recommend working there to a friend, and 90 percent approve of the CEO.

A worthwhile journey that can be a role model for others. 

Rita McGrath, Ph.D., is Founder of Valize, a Professor at Columbia Business School, and author of several books, including The End of Competitive Advantage and Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen. She can be reached through www.ritamcgrath.com.

References
1 Hewlett, S.A., M. Marshall, and L. Sherbin, How Diversity Can Drive Innovation. Harvard Business Review, 2013. 91(12): p. 30-30.
2 Botelho, T. and M. Abraham, To Overcome Gender Bias, Objective Performance Metrics Are Not Enough, in LSE Business Review (2017).
3 Phillips, K.W., et al., HOW DIVERSITY WORKS. Scientific American, 2014. 311(4): p. 42-47.
4 Rock, D. and H. Grant, Why Diverse Teams Are Smarter. Harvard Business Review Digital Articles, 2016: p. 2-4.
5 Burrell, L., We Just Can’t Handle Diversity. (cover story). Harvard Business Review, 2016. 94(7/8): p. 70-74.
6 Sherf, E.N. and S. Tangirala, How to Get Men Involved with Gender Parity Initiatives. Harvard Business Review Digital Articles, 2017: p. 2-5.
7 Ton, Z., The good jobs strategy: how the smartest companies invest in employees to lower costs and boost profits. 2014, New York: Houghton Mifflin Harcourt.
8 Bach, K. and Z. Ton, Why So Many CEOs Don’t Realize They’ve Got a Bad Jobs Problem. Harvard Business Review Digital Articles, 2019: p. 2-5.